English Language And Communication

Air Asia Sdn Bhd

(DRM 43)

Name ID NumberDarslan Nair A/L Mogan DRM 1104-002187Rishanthan A/L Mohgan DRM 1105-002246Prasanthe Reddy A/L Paidarlai DRM 1105-002262Dinesh Kumar A/L Ramesh DRM 1104-002079

Introduction

AirAsia needs no introduction in ASEAN, where it is the leading low-cost carrier, connecting people and places across 132 routes, 40 of which are offered by no other airline. In 2010, the Group, which includes affiliates AirAsia Thailand and AirAsia Indonesia, reinforced its leadership position with two remarkable milestones: flying its 100 millionth guest and breaking the RM1 billion profit barrier.

From an airline with two aircraft plying six routes in Malaysia in January 2002, AirAsia has soared in the last nine years to cover 65 destinations in 18 countries. Today, employing more than 8,000 staff and with a market capitalisation of just over RM7.06 billion (as at 31 December 2010), it is the only Truly ASEAN airline, serving the region’s 600 million population from 10 hubs in three countries - Kuala Lumpur, Kuching, Penang and Kota Kinabalu in Malaysia; Bangkok and Phuket in Thailand; and Jakarta, Bali, Bandung and Surabaya in Indonesia.

In 2011, we introduced two hubs, Chiang Mai for AirAsia Thailand and Medan for AirAsia Indonesia.

Singapore functions as a virtual hub where AirAsia features among the top 10 airlines in terms of contribution to passenger traffic. Further strengthening its ASEAN network, the Group in December 2010 signed an agreement to establish a Philippine-based low-cost affiliate, which is expected to be operational by end 2011.

The quest to democratise air travel began when Tune Air Sdn. Bhd. – founded in 2001 by Dato’ Sri Dr. Tony Fernandes, Dato’ Pahamin Ab. Rajab, Dato’ Kamarudin Meranun and Dato’ Aziz Bakar - bought over the loss-making, debt-riddled AirAsia from HI COM Holdings Berhad (now DRB-HICOM Berhad) for a token sum of RM1. The enterprising group quickly settled the airline’s debts and set about rebranding and relaunching AirAsia as a low-fare carrier.

The Group’s entire business model centres around a low-cost philosophy which requires its operations to be lean, simple and efficient. Several key strategies have been employed towards this effect, including:

High Aircraft UtilisationAirAsia focuses on high frequency and high turnaround of flights, both of which add to customer convenience and greater cost efficiencies. Its turnaround of 25 minutes is the fastest in the region.

Low Fare, No Frills This means no frequent flyer miles or airport lounges in exchange for lower fares. Guests have the choice of paying for in-flight meals, snacks and drinks.

Point to Point NetworkAll short-haul AirAsia flights (four-hour flight radius or less) and medium- to long haul AirAsia X flights are non-stop, doing away with the need for human resources, physical infrastructure and facilities at transit locations.

In addition, a decision was made in December 2004 to convert the existing fleet of ageing Boeing B737s with the higher capacity yet more fuel-efficient, reliable and cost-efficient Airbus A320s. As a result, today, the Group boasts the largest and newest A320 fleet in the region. Of its 90 aircraft, 86 are A320s, and the Group has in its order book an additional 89 A320s to be delivered. The four remaining B737s in AirAsia Indonesia are to be phased out by 2012, following which there will be less duplication of manpower requirements and reduced need to stock maintenance parts.

Collectively, these strategies have established AirAsia as the lowest-cost airline in the world, with a cost/ASK (available seat kilometre) of US3.67c. This has been achieved without compromising safety. The highest priority is given to safe operations, and AirAsia complies with conditions asset by regulators in all the countries where it operates. The Group also partners with the most renowned maintenance providers to ensure its fleet is always in the best condition.

Innovative use of technology has played a key role in AirAsia’s success story, beginning with online booking. It was the first airline in Asia to go ticketless -in March 2002 - allowing guests to pay for their bookings by credit card over the phone. Over the years, it has built on its IT platform to increase the ease of customer transactions as well as provide greater savings to the Group. In 2010, AirAsia unveiled its latest IT booking innovation in the form of New Skies, which allows customers to better manage their online bookings. With the advent of the social media, tools such as Facebook, Twitter and blogs have become integral to the Group’s customer relationship initiatives. AirAsia is, in fact, recognised as the most popular airline in the region on Facebook in terms of fan base.

The spirit of innovation is also reflected in AirAsia’s financial strategies. The company’s spectacular turnaround within18 months of operations sealed the stamp of financial wizardry that has continued to help the airline grow and win accolades such as the 2010 Asiamoney’s Best Managed Company.

While known for its no-frills approach, AirAsia is also synonymous with youthful energy and a cheeky sense of fun, as captured in its campaigns and branding strategies. The airline regularly sponsors sporting and entertainment events, and in 2010 launched AirAsiaRedTix.com, an online gateway to world class performances.

AirAsia is ultimately a people’s airline. This is mirrored in numerous acts of generosity that show the management truly cares. In January 2010, the Group joined hands with UNICEF to raise RM438 million (US$128million) for relief efforts targeted at Haitians affected by the earthquake. The airline also runs an on-going Donate Your Loose Change campaign to help needy heart patients receive treatment at the National Heart Institute in Kuala Lumpur.

The Group’s adherence to best practices has been recognised via numerous awards over the years. Perhaps most notably AirAsia has been voted the World’s Best Low Cost Airline for two consecutive years, in 2009 and 2010. This award, from Skytrax, reflects the opinions of about 18 million travellers worldwide who were polled by the London-based aviation consultant. AirAsia feels proud of such endorsement and is committed to living up to guests’ expectations by continuing to keep costs down while providing the highest levels of service and efficiency as it spreads its wings further and wider across the skies

Summary

AirAsia Berhad (AirAsia) is principally engaged in the provision of air transportation services. AirAsia flies to over 100 routes across 11 countries in Asia. Some of its wholly owned subsidiaries include Crunchtime Culinary Services Sdn Bhd, which is engaged the provision of in-flight meals; AA International Ltd, which is engaged in investment holding; AirAsia Go Holiday Sdn Bhd, which is engaged in tour operating business; AirAsia (Mauritius) Limited, which is engaged in providing aircraft leasing facilities, and Airspace Communications Sdn Bhd, which is a media owner with publishing division. On January 8, 2007, the Company acquired 100 more Airbus A320 aircraft. In October 2008, the Company announced that it has incorporated a wholly owned subsidiary in the Federal Territory of Labuan, Malaysia known as AirAsia Corporate Services Limited.

Product & Services

AirAsia Insure One-Way Travel Protection

Benefit Domestic/ Regional International1. Personal Accident Benefit

Accidental Death & Bodily Disablement

Up toRM300,000.00 Up toRM300,000.00

2. Travel Inconvenience BenefitsFlight Cancellation Reimbursement for the cost of flight if the Insured Person has to cancel the Trip due to Insured events

Up to original flight cost Up to RM5,000.00

Baggage and Personal EffectsCover lost or damage to baggage, clothing, personal effects

Up to RM1,500.00 (Any one ItemRM500.00)

Up to RM5,000.00 (Any one ItemRM500.00)

AirAsia Flight DelayFlat payment for every 6 hour period of the original departure Scheduled Flight

Up to RM1,050.00(RM150.00

per 6 hour delay period)

Up to RM1,050.00(RM150.00

per 6 hour delay period)

Missed Flight ConnectionOn the condition that there is no onward Scheduled Flight connection available

Up to RM500.00 (RM250.00 per 6 hour

delay period)

Up to RM500.00 (RM250.00 per 6 hour

delay period)

within 6 consecutive hours from the previously missed Scheduled Flight

3. Travel Assistance Services24 hours Worldwide Travel Assistance Services

- Included

Note: AirAsia Insure One-Way Travel Protection is available for one-way itineraries only. 

Additional BenefitBenefit Domestic/

RegionalInternational

Delay PlusAirAsia Flight DelayAirAsia Flight Delay Flat payment for every 6 hour period of the original departure Scheduled Flight

Up to RM1,050.00

(RM150.00 per 6 hour delay period)

Up to RM1,050.00 (RM150.00 per 6 hour

delay period)

Delay PlusOn the condition that there is a delay greater than 2 (two) hours of scheduled departure time caused solely by Carrier Operator/ AirAsia Group

Up to RM200.00 AirAsia

Electronic Gift Voucher (EGV)

Not applicable(All AirAsia X flight with Airline code started

with D7 is not covered)

Note: AirAsia Insure Return Travel Protection is available for round-trip itineraries only. 

Product rates

Plan Type Rate per GuestAirasia Insure One-Way Cover Domestic RM7.50AirAsia Insure One-Way Cover Regional RM9.50AirAsia Insure One-Way Cover International RM18.00AirAsia Insure Return Cover Domestic RM15.00AirAsia Insure Return Cover Regional RM21.00AirAsia Insure Return Cover International (1-10 Days) RM29.00AirAsia Insure Return Cover International (11-30 Days) RM49.00

Delay Plus is not applicable to All International Booking

Some of Our Additional Benefits and FeaturesTo view the full terms and conditions, please click here.

1) Coverage for accompany infant(s) who is/are named in the confirmation slip is afforded as follows:- 

a) One-Way Travel ProtectionCoverage is afforded to one (1) accompanying named infant if the Insured Person has purchased the protection herein provided.  This free coverage is limited only to Personal Accident benefit up to 10% of the stated Limit of Benefit i.e. 

b) Return Travel Protection - Domestic/ RegionalCoverage is afforded to one (1) accompanying named infant if the Insured Person has purchased the protection herein provided. This free coverage is limited only to Personal Accident benefit up to 10% of the stated Limit of Benefit i.e. RM12,500.00 

c) Return Travel Protection - InternationalCoverage is afforded to one (1) accompanying named infant if the Insured Person has purchased the protection herein provided.  This free coverage is as follows:-

Personal Accident benefit up to 10% of the stated Limit of Benefit RM20,000.00; Medical and evacuation expenses up to the limit as stated in the Summary  of

Benefit ; 24 hours Worldwide Travel Assistance Services

2) Delay PlusCoverage is afforded to passenger if the Insured Person has purchased the protection herein provided. The coverage will pay up to the value of RM200 AirAsia Electronic Gift Voucher (EGV) per passenger for delay greater than 2 (two) hours of scheduled departure time caused solely by Carrier Operator/ AirAsia Group.Coverage is not extended for accompanying infant if the Insured Person has purchased the protection herein provided.3) Other Limitations for Return Plan

Ground cover for the Trip is limited to that within the legal boundaries of Country of Arrival only. If the Insured Person travels beyond the boundary of the country, cover will exclude the geographical limits beyond the boundary of that country.

If the Insured Person departs on any scheduled flight, to travel outside the Country of Arrival, this insurance cover will suspend upon the Insured Person’s check-in for that out-bound flight. Cover will however resume upon the Insured Person’s check-out at Immigration upon returning to the original country of arrival, subject to the Period Covered, i.e. provided the period is still within thirty one (31) days of the first departure date of the Insured Person Scheduled Flight.

If the Insured Person departs on any others mode of transportation others than schedule flight, to travel outside the Country of Arrival, this insurance cover will suspend upon the Insured Person’s check-out from the immigration of the Country of Arrival. Cover will however resume upon the Insured Person’s check-in to the

immigration of the Country of Arrival, subject to the Period Covered, i.e. provided the period is still within thirty one (31) days of the first departure date of the Insured Person Scheduled Flight.

Travel Inconvenience Benefits coverage during the period of ground cover in the course of the Trip is limited only to Scheduled Flight, in the Country of Arrival.

Achievements

Year 2011

••

World’s Best Low Cost AirlineBest Low Cost Airline – Asiaby Skytrax

••

Best Company for Investor Relations – Mid CapBest Investor Relations Website – Mid Cap by Malaysian Investor Relations Association’s (MIRA)

•Asia’s Best Low Cost Cargo Carrier Award by Aviation Awards Asia 2011

•Fastest Growing Foreign Airline for Cargo by Guangzhou Baiyun International Airport

•2010 Asiamoney’s Best Managed Company Award

Year 2010

•Masterclass Global CEO of the Yearawarded to YBhg. Dato' Tony Fernandes

•World's Best Low Cost Airlineby Skytrax

•AirAsia voted the Air Cargo Industry Newcomer Award at the ACW World Air Cargo Awards 2010.by Air Cargo Week

Year 2009

•Airline Of The YearBy Centre for Asia Pacific Aviation (CAPA)

•Tony received the 2009 Frost & Sullivan Excellence in Leadership Awardby Frost & Sullivan

•Best Asian Low-Cost CarrierBy TTG Travel Awards 2009

•World's Best Low Cost Airlineby Skytrax

Year 2008

•The Laureate Award for Best Commercial Airport Transport from Aviation Week

•Tony awarded the Malaysia Brand Icon Award from Deputy Prime Minister YAB Dato' Seri Najib Tun Razak at the Global Brand Forum Malaysia

•AirAsia - Malaysia's 30 Most Valuable Brands 2008 By Malaysia’s Most Valuable Brands (MMVB)

•PIKOM ICT Organisation Excellence Award 2008By Association of the computer and multimedia industry (PIKOM)

•AirAsia X - Best New Airline Of The YearBy Centre for Asia Pacific Aviation (CAPA)

•Best Asian Low-Cost CarrierBy TTG Travel Awards 2008

•Top CEO brand & 3rd Best Corporate Brand in MalaysiaBy Pulse Group Survey

•World's Best New Airline (AirAsia X)By Budgie World Low Cost Airline Awards 2008

•Friends Of Thailand Award 2008By Tourism Authority of Thailand

•Asia Pacific's Top 1000 Brands 2008 Survey (AirAsia- Top 5 Airline) by Taylor Nelson Sofres

•Asia's Best Budget Airline under Best In Travel Poll 2008by SmartTravelAsia.com

•AirAsia wins Airline Strategy Award in the Finance Categoryby Airline Business

•AirAsia recognized as one of the 50 Most Innovative Companies In The World by FastCompany.com

•Airline Market Penetration Leadership of the Year by Frost & Sullivan

•Rising Leaders - The Next 10 Years by Singapore Institute of International Affairs (SIIA) in collaboration with AXN Asia

•Commendations of Prestige Award for outstanding contribution in Macauby Macau Special Administrative Region

Year 2007

•Airline Of The Year 2007by Centre for Asia Pacific Aviation (CAPA) Click here for Press Release

•Asia's Best Budget Airline under Best In Travel Poll 2007 by SmartTravelAsia.com

•Airline Human Capital Development Strategy Awardby Frost & Sullivan

•Asia's Best Emerging Companies with regards to Corporate Governance by The Asset

•Best Low Cost Airline in Asiaby Skytrax

•The Brand Laureate 2006-07 for brand excellence in the Airlines-Low Cost Carrier Category

Year 2006

•Malaysia’s Ernst & Young Entrepreneur of the Year 2006awarded to YBhg. Dato' Tony Fernandes

•Low Cost Airline of the Year in KLIA Awards 2006 by Malaysia Airports Holdings Berhad

•Merit Award for CAPA Airline of the Year 2006 by Centre for Asia Pacific Aviation (CAPA)

•Asia’s Best Budget Airline under Best In Travel 2006by SmartTravelAsia.com

•Best Managed Company, Best Corporate Governance, Best Investor Relations, and Most Committed to Strong Dividend Policy under The Annual Investor Poll by FinanceAsia.com

Year 2005

•The CAPA Aviation Executive of the Year 2005awarded to YBhg. Dato' Tony Fernandes

•Regional/ Low Cost Leadership Award in Airline Business Startegy Awards 2005 by Airline Business - awarded to YBhg. Dato' Tony Fernandes

•Airline Market Leadership Awardby Air Transport World (ATW)

•Transport Company of Excellence Awardby Ports World Sdn. Bhd

•Asia's Top 200 "Best Under A Billion" Companiesby Forbes Asia

•RHB AirAsia Credit Card by Superbrands

•Best Chip Program for MasterCard Marketing Leadership Award 2005 by MasterCard

Year 2004

•Asia Pacific Low Cost Airline of the Year 2004 by Centre for Asia Pacific Aviation (CAPA)

•Asia Pacific Aviation Executive of the Year 2004 awarded to Tony Fernandes, Group CEO by Centre for Asia Pacific Aviation (CAPA)

•Asia Pacific Low Cost Advertising Award for Best Asia Pacific / Middle East Low Cost Airline Print Advertisement 2004 by Centre for Asia Pacific Aviation (CAPA)

•Asia's Best Managed Company in the Airlines and Aviation Sector by Euromoney

•Best Newly Listed Company (3rd place) by Euromoney

•Triple A Regional Award for Best Airline IPO for 2004by The Asset Magazine

•Best IPO of the Year by The Edge Singapore

•25 Stars of Asia honoree listing (Tony Fernandes)by Business Week

•‘Best Uniform’ for Miss Airlines International Contest 2004 5th China Air Show, Zhuhai

•Market Leadership Award, 2005 Airline Achievement Awards by Air Transport World Magazine

Year 2003

•Developing Airline of the Year 2003 by Airfinance Journal

•CEO of the Year (Tony Fernandes) by Business Times and American Express

•CIO Top 100 Honoree for excellence in strategic IT deployment

•Obtained Malaysian Superbrands statusby Superbrands International

•www.airasia.com voted as the most popular website for online shopping in the 11th Malaysia Internet User Survey conducted by AC Nielsen Consult

Organizational Structure

The following chart shows the corporate structure and principal operating companies for AirAsia.

Directors biography  

TAN SRI DR. TONY FERNANDES was appointed Group Chief Executive Officer of the Company in December 2001. He is also a member of the Employee Share Option Committee of the Board.

Prior to joining the Company, he was Financial Controller at Virgin Communications London from 1987 to 1989, Senior Financial Analyst at Warner Music International London from 1989 to 1992, Managing Director at Warner Director at Warner Music Malaysia, from 1992 to 1996, Regional Managing Director, ASEAN from August 1996 to December 1999 and Vice President, ASEAN from December 1999 to July 2001 at Warner Music South East Asia. He was actively involved in developing the Malaysian music industry and received the title ‘Setia Mahkota Selangor’ from DYMM Sultan Selangor Sultan Salahuddin Abdul Aziz Shah in 1999 in recognition of his contributions and was also the recipient of the ‘Recording Industry Person of the Year 1997’ by the Recording Industry Association of Malaysia.

A highly decorated man, he has received numerous awards from the industry observers and international press alike. Among the awards are, ‘Malaysia CEO of the year 2003’ by American Express and the Business Times, ‘Emerging Entrepreneur of the Year – Malaysia 2003’ at the Ernst & Young Entrepreneur of the Year Awards in 2004, ‘Airline Business Strategy Award 2005 and Low Cost Leadership’ by Airline Business and he was also named Asia Pacific Aviation Executive by the Centre for Asia Pacific Aviation (CAPA) for the year 2004 and 2005.

In July 2005, he was conferred the Darjah Datuk Paduka Tuanku Ja’afar (DPTJ) which carries the title Dato’ by the Negeri Sembilan’s Yang DiPertuan Besar Tuanku Ja’afar Tuanku Abdul Rahman in conjunction with His Majesty’s 83rd birthday celebrations in recognition of his services rendered to the betterment of the nation and community. In 2006, he was named the Master Entrepreneur of the Ernst & Young Entrepreneur of the Year 2006 Malaysia. He also bagged ‘The Brand Laureate’ Brand Personality for his exemplary performance, dedication and contribution towards the aviation industry in Malaysia in the same year and also in 2007. He was admitted as an Associate Member of the Association of Chartered Certified Accountants in 1991 and became a Fellow Member in 1996.

In 2007, he was conferred yet another title, the Darjah Sultan Ahmad Shah Pahang (DSAP) which carries the title Dato’ by the Pahang’s KDYMM Sultan Haji Ahmad Shah ibni Almarhum Sultan Sir Abu Bakar Riayatuddin Al- Muadzam Shahas recognition of his services rendered to the betterment of the nation and community. In 2008, he was bestowed

with another title by the Sultan, the Darjah Kebesaran Sultan Ahmad Shah Pahang Yang Amat Di Mulia which carries the title Dato’ Sri.

In 2009, he was conferred the ‘CAPA Legend Award 2009 (Aviation Hall of Fame)’ in recognition of his influential actions for directly shaping the way the aviation industry has evolved, and ‘Airline CEO of the Year Award for 2009’ from Jane’s Transport Finance, for successfully leading and growing AirAsia into the world’s best low-cost airline and Asia’s largest.

In March 2010, he received an Honorary Doctorate of Business Innovation from Universiti Teknologi Malaysia (UTM), a recognition for his role in changing the face of aviation and benefitting travelers and economies locally and in the region, and the following month the title of ‘Officier of the Legion d’ Honneur’ by the government of France for his outstanding contributions to the aviation industry. The Legion d’ Honneur -- the highest rank of honour that the government of France can award to a non-French citizen -- was established by Napoleon Bonaparte in 1802 to recognize outstanding service to France.

In April 2010, he was honoured with the title of ‘Officer of the Legion d’ Honneur’ by the government of France for outstanding contributions to the French aviation industry. It is the highest rank of honour that the government of France can award to a non-French citizen.

The following month, he received the prestigious Nikkei Asia Prize in Tokyo for his contributions to the growth of Asia. The prize, given by leading Japanese newspaper publisher Nikkei Inc., recognised his role in democratising travel in Asia.

Fernandes also received the prestigious Forbes Asia Businessman of the Year 2010 award. He is the first Malaysian and Southeast Asian to receive the award.

In February 2011, he was awarded the Commander of the Order of the British Empire (CBE) honour by Her Majesty Queen Elizabeth II. The award was conferred on him for services in promoting commercial and educational links between the United Kingdom and Malaysia.

In April 2011, Tony was conferred Darjah Seri Paduka Mahkota Perak (S.P.M.P) which carries the title Dato’ Seri at the Istana Iskandariah in Kuala Kangsar.

 

Major shareholders

As of 19 May 2011, about 26% of the total share capital was owned by Tune Air Sdn. Bhd. AirAsia Berhad is a substantially owner managed company, the cumulative ownership by the board of directors constitutes approximately 28% of the share capital.

Top 5 shareholders % Holdings

6 July 2011

Tune Air Sdn Bhd 26.28% 729,458,382

Employees Provident Fund Board 8.06% 223,644,400

Genesis Smaller Companies 5.43% 150,635,581

Wellington Management Company 5.31% 147,342,635

The Nomad Investment Partnership Lp Cayman 4.91% 136,300,000

Public 48.51% 1,388,143,082

100.0% 2,775,524,080

Conclusion

Air Asia (AA) has exposed us an insightful example in showing how a keen and

critical strategic movement may drive a company that was almost bankrupt back into

shape. While AA management was providing a suitable business environment, its

employees demonstrated a highly productive and efficient performance in running the

business and reducing cost. AA decision on using uniform aircraft also put into account.

It emphasized the principle of economies of scale and also it will eventually reduce

learning curve. However, AA actual main strength was based in its innovative ways to

keep the cost low which was hard to imitate. With those entire factors combined together,

AA has shown how synergies between management, employee and its environment can

develop a competitive advantage that brought Air Asia to be the contender as market leader

in the competition.